Emmanuel Addeh in Abuja
Nigeria could potentially rake in between $500 million to $600 million in the latest gas development deal between the country’s national oil company, the Nigerian National Petroleum Corporation (NNPC) and Sterling Exploration and Energy Production Company, (SEEPCO), an Indian company.
The NNPC and SEEPCO signed off on the agreement for the monetisation of Oil Mining Lease (OML) 143 in Abuja, a development the corporation says will help increase its footprints in the downstream gas market and boost the country’s revenue accruals from gas.
The contract on the development and commercialisation of gas from OML 143, tucked in the deep forests of the Niger Delta, could also help reduce gas flaring in the country, NNPC added.
SEEPCO is an Indian company, part of the Sandesara Group that ventured into Nigeria oil and gas market over a decade ago and says it is currently successfully producing crude oil in the Niger Delta region.
On its official website, Sandesara Group notes that it expanded the E&P portfolio from India to Nigeria in 2006 through another subsidiary Sterling Global Oil Resources Limited (SGORL) by signing a Production Sharing Contract (PSC) for OPL 277 Block with Government of Nigeria.
With a further award of the OPL 280 block and the PSC signed in April 2007, SEEPCO notes that its businesses spans six continents and several countries, including India, USA, China, Japan, Europe, Middle East and South East Asia.
A report by Wood Mackenzie, a firm providing strategic decision-making capabilities in global natural resources with data, analysis and advice, states that OML 143 is located in thickly forested terrain in the northern Niger Delta and contains two producing fields, Okwuibome, said to have been discovered by Shell in 1979 in addition to the smaller Anieze field.
Speaking at the agreement signing ceremony which held at the NNPC Towers, the Group Managing Director of the national oil company, Mallam Mele Kyari, described the execution of the deal as a great milestone as well as a testament to NNPC’s commitment to facilitating the nation’s transformation into a gas-powered economy.
A statement by the Group General Manager, Group Public Affairs Department of the NNPC, Dr Kennie Obateru, said the deal would not only help reduce gas flaring and its environmental hazards, but would also promote gas production and utilisation in the domestic market.
The GMD also commended SEEPCO for its unwavering commitment to gas development and commercialisation in the country which he said has led to the establishment of a Special Purpose Vehicle (SPV) that will help expand gas utilisation in the country as a cleaner, cheaper and more reliable alternative form of energy.
On his part, the Chairman of SEEPCO, Mr. Tony Chukwueke, described the deal as an essential partnership that would help the company fulfil the pledge it made to support the efforts of the Nigerian government to eliminate gas flaring by monetising it.
He commended NNPC and the GMD for ensuring the execution of the agreement which he described as central to the achievement of the company’s cardinal objective of boosting the production of gas in the country.
Chukwueke said that the production would include Liquefied Petroleum Gas (LPG), condensates and dry gas for the Nigerian market, adding that the company has invested about $600million for the purpose.